Sequoia Fund Q3 2018 Letter: David Poppe Retiring

For the third quarter of 2018, Sequoia Fund generated a total return of 4.01%, net of fees, versus a 7.71% return for the Standard & Poor’s 500 Index. The Fund generated an 11.45% total return year-to-date through September 30, 2018 versus a 10.56% return for the Index.

Biggest news in the Q3 2018 letter is the retirement of David Poppe saying:

We are sad to report that David Poppe, our valued partner, has decided to retire from Ruane Cunniff at the end of this year. It is hard to overstate the contribution he has made to our Firm over nearly twenty years, first as an analyst, then as our President and later CEO, and more recently as a member of our Management and Investment Committees.

David is ready for the next phase of his life and we wish him happiness and success in the years ahead. We will miss his leadership, which helped guide us through difficult times, and his penetrating insight as a business analyst, which has contributed immensely to our investment process over the years. David and his family will remain our clients after he leaves, but much more importantly, they will remain great friends of our Firm and our team. We often say that we are as much a family as a firm, and the Poppes will always be part of our family.

With David’s departure, the size of our Investment Committee will shrink from six people to five, and from five voting members to four. The size of the Firm’s Management Committee will increase from three to five people, with Arman, Trevor and Chase joining Greg and John. As a result, while this may not always be the case, for the foreseeable future, our Investment and Management Committees will look exactly the same.

We often note how Bill Ruane used to say that the title on his business card read “analyst” instead of “founder” or “CEO”. His point was to emphasize the fact that a commitment to fundamental company research is the core of who we are as a Firm, and we know Bill would have been proud of the way that David cultivated that ethos over the course of his career.

Gathering the facts required to truly understand a business is painstaking and often unglamorous work. Few people relish it, fewer still have the talent to synthesize the facts they gather into useful insights, and fewer still have the emotional makeup required to turn useful insights into rational and ultimately remunerative judgments. David is the whole package, and we are thankful for the way in which both his leadership and his example have helped Ruane Cunniff remain a unique sanctuary for people who think about an investment as a long-term ownership interest in a business, who are humble about what can be known and what can’t, who treat others with kindness and respect, and who love to learn.

We are also grateful for the central role he has played in the process of generational transitionand renewal we have undertaken over the past two years. Both our investment and business teams have never been deeper, stronger, more energized or more replete with opportunities for growth and development, and based on the quality, growth potential and valuation of the companies in our portfolio, we remain as confident as ever in the Fund’s potential to outperform over time.

None of these accomplishments would have been possible without David. He is proud of the fact that he leaves Ruane Cunniff in better form than he found it, and he is grateful to our clients and employees for their support, partnership and friendship over the years, just as we are so deeply grateful to him.